What It's Like To Watch Mathew Martoma's Trial For A Day

Former hedge fund portfolio manager Mathew Martoma exits a New York federal court after being charged in one of the biggest insider trading cases in history on November 26, 2012 in New York City. Spencer Platt/Getty Images Ever been in a courtroom? Ever witnessed one man's fate resting in the hands of a jury? Well, it's serious business, with all the drama, sorrow, intrigue and regret you'll find anywhere.

This real life drama has been taking place for the past couple of weeks in District Court Judge Paul Gardephe's courtroom, where Mathew Martoma has been accused of, and is on trial for, obtaining confidential, non-public information from two doctors who had been involved in clinical trials for a drug to treat Alzheimer's disease.

Allegedly, he then made trades (getting out entirely of the long positions SAC held) in the companies Wyeth and Elan, based on the information, that in some of the clinical trials this particular drug had not reached its goals. These trades helped SAC avoid enormous losses (based on those original long positions) in these companies, and to eventually reap a profit of $276 million on the trades.

If you haven't been in a courtroom in awhile, let me tell you it's a far cry from the "Perry Mason" days. There are computers in front of each opposing sides; the defense and the prosecution. There are large TV monitors set up on every angle of the room, to see and read whatever exhibits are being presented into evidence. The judge has computer screens in front of his desk, and when you glance over to the jury box you see monitors for each and every member of the jury. High tech everywhere you look. The room hums with precise efficiency, and the tension and drama are omnipresent. It's not Hollywood, it's very real.

As I enter the courtroom 30 minutes ahead of the 10:00am start, Matt Martoma and his legal team are already there. I'm sitting just two rows behind Mr. Martoma, who is dressed somberly in a darkish suit and blue tie. He is stone-faced, rigid, and stares straight ahead. Except for an occasional glance back at his wife every now and then, he shows zero emotion. While I can't possibly know for certain what he's thinking, you can garner an idea that he's scared as hell. And who wouldn't be!

Lead attorney for Mr. Martoma, Richard Strassberg, seems to be making polite chit-chat with the prosecution, while various members of his team scurry about fetching documents and papers. Present in the first row are Martoma's wife Rosemary and other family members.

On the other side of the courtroom you have the prosecution, fired up with confidence knowing that since 2009 the US Attorney's office has nailed down 77 convictions without losing a single trial. That's right, not a single trial.

You look around the room and can't help but wonder how Martoma's successful life came to this, where and when exactly was that first wrong turn, why did his moral compass fail him, could the $9 million bonus he received at SAC possibly been worth it?

The next 45 years of Mr. Martoma's life are being decided by 12 jurors inside courtroom, #110. By the end of this week or early next, Martoma's fate will be in the hands of these seven women and five men.

Will Martoma and his family return to their luxurious Boca Raton, Fla. home, (helped by the $9 million dollar bonus he received in 2008) or will he be sent to prison, perhaps for 45 years, where there will certainly be no luxury. Just misery.

On the stand today was Mr. Martoma's former research analyst, Katie Lyndon, who joined SAC in September of '07 and left two years later. She is now employed by Maud Capital in Chicago, Ill. Speaking timidly and nervously, initially Ms. Lyndon was hard to hear, prompting Judge Gardephe to ask her to slow down and speak more directly into the microphone. One of the main points the prosecution tried to nail down, and get Ms. Lyndon to explain as best she could, was how the two largest long positions in Martoma's portfolio (Wyeth and Élan) suddenly (the day before the bad news about the Alzheimer's drug was released) had been sold off and in fact was now a short position. At SAC there is a computer program called "Panorama," which allows portfolio managers and research analysts to see current positions.....however these aforementioned trades were done away from panorama so no else in the firm (other then Steve Cohen and Matt Martoma) could see the executions and the newly created position. Strange.

The jury seem attentive, and in spite of all the trader jargon & Wall Street jibberish that's thrown about the during the day, they eagerly take notes and pay close attention. They know their responsibility here; Martoma's next 20-45 years rests in their hands. It seems that neither the defense or prosecution wants to overburden the jury with too many minute details, but instead are sticking to the facts and trying to keep their presentations as simple as possible.

Closing arguments will most likely take place towards the end of this week or perhaps early next.

Needless to say, until then, these will be hard stressful days for Matt Martoma and his family. I believe, however, that the worst is yet to come for him, and the US Attorney's office will have another insider trading conviction.